SINGAPORE (May 10): Wilmar International reported 1Q19 earnings came in at US$257.0 million ($350.5 million), 26.4% higher than the US$203.3 million recorded in 1Q18.
The stronger bottom line was driven by better results in the Tropical Oils and Sugar segments.
Tropical Oils benefitted from improved margins and sales volume in its manufacturing and merchandising businesses.
Stronger performance in milling, refining and merchandising activities lifted the performance of Sugar segment.
In addition, volume growth in the Consumer Products businesses further contributed to the improvements in results for the quarter.
However, the improvements were partially offset by negative crush margins and lower volume in the Oilseeds and Grains segment due to the African swine fever outbreak in China and the sharp drop in Brazilian beans basis.
Revenue was 6.2% lower at US$10.4 billion from US$11.1 billion a year ago, despite overall sales volume increasing 4.5% y-o-y.
Cost of sales declined 7.6% y-o-y to US$9.4 billion.
Gross profit rose 9.1% to US$1.0 billion from US$926.9 million a year ago.
Finance income grew by 22.1% to US$126.0 million from US$103.2 million in the previous year, on the back of higher average deposits placed during the quarter, partially offset by lower mark-to-market gains from interest rate swaps recognised during the period.
Correspondingly, finance costs increased by 50.8% y-o-y to US$233.9 million, due to higher effective borrowing rates and higher average bank borrowings.
Other operating expenses tripled to US$28.8 million from a year ago.
As at end March, the group’s cash and cash equivalents stood at US$1.9 billion.
Kuok Khoon Hong, chairman and CEO of Wilmar, says, “The group reported a reasonably good set of results in 1Q19, given the tough operating environment. The improved performance by both Tropical Oils and Consumer Products businesses since 2Q18 has been encouraging. With the exception of sugar milling and palm plantation, most of our businesses are doing reasonably well. Further, crushing margins are also expected to improve in 2Q19. We are cautiously optimistic that performance for the rest of the year will be satisfactory.”
Shares in Wilmar closed at $3.51 on Friday.
